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The Producers

1.

For many Americans the long expansion of the economy during the 1990s reinforced the belief that technological advances will naturally lead to prosperity. So strong is this belief that the stock market crash, financial scandals, and a few years of recovery without many new jobs have not undermined it. Supporting this optimistic view of the economic future are gains in productivity, or the output of the economy per hour of work. In the second half of the 1990s, productivity grew rapidly. Not only did stock prices, profits, and the fortunes of the rich rise, but so did the wages and salaries of most of the rest of us, even the working poor.

According to most accounts, the emergence of the new economy—the proliferation of personal computers, of the Internet, of computerized business activity generally—led to a sustained rise in productivity, and rising productivity, as it is supposed to do, resulted in a higher standard of living. Meantime, Europe and Japan could not keep pace, as unemployment rates rose and remained high, and national incomes rose slowly. In short, to many, the US economy was apparently back on its rapid historic track and, in light of relative foreign stagnation, the case for American exceptionalism had found new justification.

That technological innovation will continue to propel the economy is widely assumed by many commentators. It is hardly surprising that Harold Evans, former publisher of Random House, editor of the London Times, and author of The American Century, has published a book of celebration of the nation’s great technological and business innovators, They Made America. “Practical innovation more than anything else is the reason America achieved preeminence while other well-endowed landmasses lagged,” Evans writes. There is, of course, much more to America’s remarkable economic success than that, not least the country’s available land, huge natural resources, and the size of its domestic market. But Evans is more interested in the stories he has to tell than in the broader conclusions they may or may not suggest. His heavily illustrated book, written with Gail Buckland and David Lefer, is a detailed and perceptive account of the efforts of seventy people whose contributions were critical in giving shape to American life. Evans devotes chapters to such familiar inventors and entrepreneurs as Eli Whitney, Henry Ford, Thomas Edison, Walt Disney, Estée Lauder, and Ted Turner, among dozens of others. But we also learn of many people few will recognize, among them Henry Miller Shreve, who, in the 1830s, cleared the nation’s rivers of fallen trees and other debris for travel; Theodore Dehone Judah, who, as its chief engineer, made possible the transcontinental railroad; Martha Matilda Harper, who franchised beauty salons in the early twentieth century; Ruth Handler, co-founder with her husband of the Mattel toy company and creator of the Barbie doll; and Gary Kildall, who wrote the first and best of the computer operating systems.

Evans is careful to show that none of these men and women did it on their own. “There are many eureka moments,” Evans writes, “but antecedents always matter.” The ambitious Robert Fulton combined the innovations of the Englishman James Watt, the American John Fitch, and others to make his commercial steam-boat. Isaac Singer liberally drew on and perhaps stole the advances of earlier sewing-machine pioneers. Samuel Colt’s repeating six-shooter was based on the work of gunmakers like the Bostonian Elisha Collier, who had already devised a rotating chamber. Bill Gates’s operating system, DOS, still the standard in the industry, and the source of Microsoft’s domination, was derived from Thomas Patterson’s QDOS, which in turn was “a slapdash clone of” Gary Kildall’s CP/M.

How the operating system created by Kildall, a true visionary who “wrote code as Mozart wrote concertos,” unjustifiably lost out to the inferior system of Bill Gates is the most fascinating of the stories in Evans’s book. In 1980, IBM began negotiations with both Microsoft and Kildall’s company DRI to develop an operating system for a new line of personal computers. Although Kildall was finishing a new version of his system that was far more advanced than anything Microsoft could offer, Gates persuaded IBM to go ahead instead with Patterson’s inferior copy of Kildall’s earlier operating system, which was renamed PC-DOS. Microsoft’s PC-DOS thus became the standard operating system for most PCs and, on the strength of Kildall’s original innovations, Gates became the dominant force in the software industry.

What interests Evans most is the intense commercial ambition of these people, which, he argues, I think correctly, has set America apart from other countries. Most of Evans’s innovators were determined to build large companies, and most were also determined to strike it rich. But was this an innate American trait or a response to the unusual opportunity afforded by a vast continent of consumers with some money to spend? Evans gives much emphasis—too much, in my view—to what he considers America’s exceptional character:

For the most part, they did not come with any special secret, any patented invention, any great wealth or connections. When they disembarked, blinking in the bright light of the New World, they had no idea what their destinies would be. The magic was in the way they found fulfillment for themselves—and others—in the freedom and raw competitive excitements of the republic.

Innovation, the concept and activity that made Dr. Johnson shudder, has turned out to be a distinguishing characteristic of the United States.

Evans recognizes, however, that the principal American innovation in manufacturing was something more down to earth, the interchangeability of parts. The many different parts of complex products had to be identical so that workers with little skill could assemble them quickly. He traces this practice along its hundred-year path to maturity, from Eli Whitney’s firearms to Colt’s revolvers and ultimately to Henry Ford’s assembly line. The so-called “American system” became the basis of mass production. But mass production was dependent on mass markets, and no other industrialized country had markets comparable in size and income to those in America. Henry Ford’s opportunities would have been much more limited in France, Germany, or England.

It is not surprising that these innovators were usually also exceptional in their ability to market products. They cleverly persuaded Americans to buy their goods, and in the process gave shape to the nation’s culture, for better and worse. Fulton publicized his cruises as the pinnacle of glamour. Colt published many tall tales of violent gun-slinging heroes to romanticize his Colt .45, and he created effective macho advertising slogans such as “There is more law in a Colt six-gun than in all the law books.” Ruth Handler quickly exploited the explosive growth of television by advertising her Barbie dolls on the new national networks.

Inevitably, Evans’s selection of business innovators is somewhat arbitrary. He relegates James Duke, the great marketer who created America’s cigarette industry, to an also-ran section in the back of the book, as he does Sam Walton of Wal-Mart and Henry Luce. But their innovations were no less important in their effects on American life than those of, say, Ted Turner, who is justifiably discussed at length. Evans apologizes for not including more women and in particular African-Americans, observing that both were victims of prejudice and disadvantages. Nevertheless, it would have been instructive to say more about African-Americans who achieved business success in spite of the odds against them. Carol Jenkins and Elizabeth Gardner Hines, for example, recently published Black Titan, the biography of Arthur Gaston, who was born in 1892, made a fortune in insurance, bailed Martin Luther King Jr. out of jail in 1963, and was named by Black Enterprise magazine the Entrepreneur of the Century in 1992.1 John Johnson, who created an empire of publications based on his magazine, Ebony, and Berry Gordy of Motown are also relegated to a paragraph or two in the back. Few people, moreover, are aware of the women who were leaders in developing electronics. Sandra Lerner, for example, was a cofounder of Cisco Systems and is now an imaginative philanthropist who has restored Jane Austen’s family house in England to serve as a center for the study of women’s literature.2

Still, Evans’s book sticks to the facts, presents them with admirable clarity, and largely avoids illusions. The same can’t be said of John Steele Gordon’s broadly conceived history of the American economy, An Empire of Wealth: The Epic History of American Economic Power. Gordon is a columnist for American Heritage magazine and author of several books of history. Technological innovation is central to his approach, and his book has been much praised by critics, for example the Newsweek columnist Robert Samuelson, who has called it “the best one-volume economic history of the United States in a long time and, perhaps, ever.” But the book turns out to be little more than a restatement of clichés about American superiority. Parts of it recall some of the more rhapsodic descriptions of Henry Steele Commager or the nineteenth-century historian George Bancroft; but they were both original and distinguished historians, while Gordon tells us an all-too-familiar story about Yankee ingenuity and the uniqueness of the American character. Readers may think they are reading a competent summary of economic progress in the United States, particularly because Gordon has a gift for narrative, but that would be a pity.

Gordon pays scant or no attention to such critical influences on the US economy as free and widespread primary education by 1830, the early extension of suffrage to all white males, including those who did not own land, or America’s sweeping religious conversions throughout the nineteenth century. I could not find mention of the relation of the Protestant work ethic to business success and nothing is said about the Second Great Awakening, which was also associated with that success. Gordon is largely dismissive of government, writing casually, “People in government will always try to help those who are powerful at the expense of those who might become so.” But he has no consistent view. He praises the development of the Erie Canal by New York State and he writes enthusiastically about Franklin D. Roosevelt’s New Deal; only a few pages later, he approves of Ronald Reagan’s attempts to roll the New Deal back. In Gordon’s history of the American economy, we find little emphasis on managerial innovation and excellence, economies of scale, or the American use of interchangeable parts—all of which figure in Evans’s book.

The desire to assert America’s natural superiority results in absurd exaggerations. Near the beginning of his book Gordon writes,

Virtually every major development in technology in the twentieth century—which was far and away the most important century in the history of technology—originated in the United States or was principally industrialized and turned into consumer products here.

He provides no convincing evidence to justify such a claim. In fact, most of the important pioneering work on such crucial twentieth-century technologies as nuclear energy and quantum mechanics was done by Europeans before World War II. Early in the century many of the world’s leading chemists and chemical industries were still in Germany; America eagerly took the enemy’s patents as booty in World War I.3 Europe produced such crucial medical advances as Roentgen’s X-ray and Fleming’s penicillin. Rocketry was mostly European in origin as well with the exception of the work of the American scientist Robert Goddard. The world’s most powerful particle accelerator will soon open in France.

  1. 1

    Black Titan: A.G. Gaston and the Making of a Black American Millionaire (One World, 2004).

  2. 2

    For a refreshing, well-researched and elegantly written reminder that many people also failed in America, see Scott A. Sandage’s Born Losers: A History of Failure in America (Harvard University Press, 2005).

  3. 3

    For a superb history of industrial research see Paths of Innovation: Technological Change in Twentieth-Century America by David C. Mowery and Nathan Rosenberg (Cambridge University Press, 1998).

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